Marco Santori, President and Chief Legal Officer of Blockchain, spoke about the impact SEC’s framework would have on security tokens, during an interview with Laura Shin for Unchained Podcast. He also spoke about the guidance on airdrops being classified as a security.
Santori stated that the framework was not precedent, clarifying that it was not “set law.” He explained that if a person loses money in an ICO and wanted to sue the ICO seller, and if that ICO seller subsequently tried to get the case dismissed, then the person would not be able to cite this in their framework.
“This would not be sufficient or at least it shouldn’t be as they teach you in law school, you would want to say actual cases that have precedential value. This does not have precedential value, but its clear reasoning. And in the absence of precedent and there is very little precedent in the crypto space, you will see courts use this as a short-cut.”
This was followed by the President stating that there will be more definite clarity in the future from court decisions, as the SEC does not get to decide what is a security. The court does, he emphasized.
Further, Santori spoke about the SEC’s guidance on airdrops, where they stated that an airdrop can be classified as a distribution of securities. To this, the Chief Legal Officer completely agreed with the SEC’s stance, adding that these were one of the few things the SEC was clear on.
[…] but, there has be a security that’s being offered separately. You have to satisfy an Howey Test independently of it being an offering of securities. In other words, in order for you to make an offering, there has to be a security underneath it. You can’t use the airdrop as an investment to satisfy the prong of an investment of money, but you can use it to satisfy the prong of whether issuer got value from it […]”
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